Your Sales Engine is Leaking

Sales engineYour sales engine is all fired up and ready to go. It’s budgeted for tradeshows, sales salaries and commissions, entertainment, ads, collateral, telemarketing, web and social media. Sales personnel and management are in place and motivated. It sounds good, looks good too, but something’s off. And there it is, broken and ignored. The unseen revenue leak. The leak that spills all sales opportunities onto the garage floor. A few winners amongst a sea of losers.

Cut to the Chase

What’s leaking is your lost bid opportunities. You’ll lose twice as many as you win. If you’re lucky that’s 66% lost and 33% won (which is winning at a high rate!). The leak comes from not reducing the number of lost sales proposals.

Your Sales’ Reality

The proportion of business you did win is 1/2, 1/3 or fewer of the bids you tried for. Your shiny new contracts don’t look as glowing now they’re compared to all the ones you could have had.

Sure, you won some, and will win more, but at what cost?

Cost per Sale

What’s it cost you to generate one sale? Simple, gather last year’s costs for:

  • Trade shows & association dues
  • Sales salaries, payroll taxes, benefits, commissions & company cars
  • Entertainment
  • Ads & collateral
  • Direct mail
  • Telemarketing
  • Web & social media
  • Administrative support to sales staff

Divide the total costs above by the number of sales you had last year. That’s your cost for producing a single sale. Now don’t you have that operational itch to want to reduce that cost? Go on, admit it. Here’s how.

3 Ways to Reduce your Cost per Sale

There are three ways to do this. Each has their consequences.


Win more contracts from the same number of opportunities.

This is the fastest and easiest way to reduce cost per sale. It’ll also increase your total number of sales as in number 2 below. However, you’ll need outside help otherwise you’d be doing this already.


Keep the same loss/ratio but increase the number of sales you make.

This is what you try to do every year. It’s difficult and often takes additional investments in more salespeople, expensive mailings or lead generation. Some sellers heavily discount their pricing to achieve this goal but that’s a another very dark story.


Lower sales expenses and try to hit the same number of sales and opportunities.

This is the least likely to happen. It’s cutting off your nose to spite your face. Unless of course there was excessive spending in non-productive areas, maybe too much wining and dining.

Lost Opportunity Costs – Yours

You certainly should be addressing your customers’ Lost Opportunity Cost.

Since it makes good business to tell your customers to fix what needs fixing – it makes even better sense for you, as a seller, to do the same. Think of lowering your cost per sale.


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